HNWI Scheme

Malta has issued new High Net Worth Individuals Rules to permit individuals wishing to apply for a special tax status in Malta under Legal Notices 400 and 403 of 2011 respectively.

An individual who is eligible to be granted special tax status must satisfy the following requirements:

a.the applicant must hold a Qualifying Property Holding. This is satisfied where the individual (i) owns an immovable property in Malta purchased after 1 January 2011 for a consideration of not less than EUR 400,000; or (ii) having already filed an application under the Residents Scheme Regulations, which application was duly received and acknowledged by the Commissioner of Inland Revenue, and either owns an immovable property in Malta which was purchased before the 14 September 2011 for a consideration of not less than EUR 116,000, or became a party to a promise of sale before 14th September 2011 to purchase an immovable property in Malta for a price of not less than EUR 116,000; or (iii) rents an immovable property in Malta for not less than EUR 20,000 annually as lessee.

b.the applicant does not benefit from the Residence Scheme Regulations or the Highly Qualified Persons Rules;

c.the applicant needs to be a citizen of the EU (but not of Malta), or a citizen of Iceland, Norway or Liechtenstein, or a citizen of Switzerland;

d.the applicant is in receipt of stable and regular resources that are sufficient to maintain himself/herself and his dependents without recourse to the social assistance system in Malta;

e.the applicant is in possession of a valid travel document;

f.the applicant is in possession of sickness insurance which covers himself and his dependents in respect of all risks across the whole of the EU normally covered for Maltese nationals;

g.the applicant is not domiciled in Malta and does not intend to establish his domicile in Malta within 5 years from the date of the application for special tax status;

h.the applicant is a fit and proper person.

An individual who satisfies the above conditions may qualify for special tax status and be subject to a rate of 15% on any income that is received in Malta from foreign sources. This rate of tax will apply from the date of confirmation of the special tax status.

Such individual retains the right to make a request to the Inland Revenue for a relief of double taxation under Article 74(a) and (b) of the Income Tax Act, on condition that the following conditions are satisfied –

- the minimum amount of tax payable by a beneficiary is EUR 20,000 for any year of assessment; and

- a beneficiary with dependents must pay an additional EUR 2,500 for any year of assessment for every such dependent.